The Navajo County Community College Governing Board gave its approval to a two percent tax levy May 17 after holding a Truth in Taxation hearing that brought comments from three people.
The levy will produce an increase in primary property taxes of $281,072, but what is unusual this year is that once new construction is included in the formula, NPC will receive $147,386 less from the primary tax levy than in fiscal year 2015-16. This is a result of the negative new construction for Navajo County of $24.4 million, which decreases the overall levy, even though the levy is set at the maximum under the state’s Truth and Taxation statutes. The negative new construction valuation is partly related to closures at the Cholla Power Plant and the Peabody coal mine. The total amount that will be provided by the levy for Northland Pioneer College in fiscal year 2016-17 is $14.3 million.
Director of Financial Services Madeira Elliston cited as an example the tax increase a homeowner whose home was valued at $100,000 would experience. “The proposed tax increase will cause the property taxes on a $100,000 home to increase from $175.34 to $178.84 annually, or an increase of $3.50,” said Ellison.
When the discussion of the impact of the tax increase began, board member Frank Lucero asked why the tax rate keeps going up, but never down. He said that he felt what was driving the decision to increase taxes was the partial closure of Cholla Power Plant. “My concern is that we need to act like adults and live within our budget,” he stated.
It was noted by Ellison that all but three of the 21 community colleges in the state were pursuing the maximum two percent increase.
The first member of the public to address the board during the hearing was Holbrook businessman Jay Williams, who told the board that he has been a businessman since 1951 and owns several businesses in the community. He explained that his estate has decreased by 50 percent from 10 years ago. “When will you stop increasing taxes and put it back where it should be?” he asked. “I’ve worked hard for what I have. Instead of increasing the rate, let’s reduce it.”
Brad Farber told the board that he was present by proxy for the owners of 70,000 acres of land in the southern portion of the county and that he is against an increase in taxes. “I continue to tell the property owners to sell their properties and get out, even if it means losing money, because this county is not going to survive, it’s not. I’m pleading with the board to not allow an increase,” implored Farber.
Wayne Reeves of Snowflake told the board that as an accountant of 30 years who had taught in the college system in Utah, he knew where the money was going. “When I was an instructor I was paid almost nothing, yet it cost $150,000 to put me in the classroom. It was the administration that got the money, not me,” he said, indicating that he thought the same was taking place at NPC. He wanted to know why the college didn’t cut some of those expenses. “Have things changed that much in nine years? What have we got? A better college, better quality graduates? I don’t mind paying if I see benefits and I don’t see it,” he added.
After listening to comments on the matter, board member Prescott Winslow moved to approve the two percent increase. “I have no quality or education issues. But is the property value increase a good value?” he asked. Winslow explained that the college is one of three community colleges in the state that receives equalization funding. “We receive $6 million in funds from outside our tax district due to our low and decreasing property tax base. I think it’s a reasonable price to pay for $6 million. Outside of our county they may not agree,” he said.
James Matteson seconded the motion, which was supported by Chairwoman Ginny Handorf and Daniel Peaches, with Lucero voting against the measure.
The board also held a public hearing for the adoption of the proposed budget of $26.4 million. Ellison noted that $10 million of the budget goes toward instruction, which includes Information Services. “Information Services provides for a very large area of support compared to other colleges,” she noted, referring to the four campuses and six centers throughout Navajo and Apache counties. “This provides a tremendous savings for students who don’t have to travel so far to attend class.”
Lucero asked if there was a line item that addressed any new construction at the Snowflake campus and Ellison replied that there was not.
Both Farber and Reeves once again addressed the board, with Farber expressing concerns regarding the quality of education, and questioning the accuracy of how the college reports the number of students attending NPC and the number of completers, and how the college could afford to offer summer fun classes to kids.
Vice President of Students Services Mark Vest addressed those concerns, explaining that the Integrated Postsecondary Education Data System (IPED) that Farber had referred to was a university system for reporting student enrollment, and that the methodology required for that reporting did not reflect the actual number of students attending or completing a degree at NPC. “The information (on completers) is collected pertaining to fulltime, first-time students, and only 10 percent of our student population meets that. Our nursing program takes longer than others, so those students are listed as ‘non-completers.’ In addition, high school dual enrollment students are not included in those figures,” he said, also noting that the average student age is 32, with many students attending sporadically, unlike students at a four-year institution.
As far as state accountability, the requirement is to take the total number of credits that are enrolled and divide it by the number of students to determine the number of fulltime student equivalents (FTSE). According to the IPED report, the FTSE for NPC is 1,844 students. “In actuality, we have approximately 3,500 students enrolled in credit bearing classes and 700 to 800 in non-credit classes,” explained Vest.
He also explained that the data provided by the state universities show that students from rural areas who attend community colleges prior to transferring to a university tend to do better academically and are more likely to obtain a four-year degree.
Regarding NPC’s Kid’s College, Vest explained that it is virtually self-funded, with teacher salaries paid by tuition. “The intent is to make education fun. Most of our classes are STEM (Science, Technology, Engineering and Math) based, so when they move on to high school they are already thinking of a college career,” stated Vest, adding that a National Science Foundation grant pays for most of the supplies for these classes.
Board member James Matteson commented on the reduced revenues that will be collected by the property taxes despite the increase, and asked Ellison about the college’s obligation regarding health care costs. “Am I correct in saying that the 20 percent increase in Medicaid cost is not from us (the college)? That these are forces outside of Holbrook, Arizona?” he asked Ellison.
She replied that he was correct.
He also asked if an increase was made in equalization funding.
“Our equalization funds are currently at $6,077,800 and we will see a 4.2 percent increase in funding over the amount received in 2015-16,” Ellison replied.
When asked by Lucero what percentage of the budget went toward administrative salaries, Ellison stated that approximately 70 percent of the proposed $26.4 million budget goes toward salaries.
NPC President Dr. Jeanne Swarthout interjected to clarify that of that percentage, roughly 15 percent goes toward administration salaries. “In 2008, the recession decreased the administration structure to half and it has remained basically the same since that time,” she explained.
Also presented was a proposed three-year capital project budget of $5.3 million for 2016-17, $6.3 million for 2017-18 and $4.8 million for 2018-19.
Ellison explained that funding has been identified as a combination of current fund balances, contributions from ongoing general fund operating revenues and state appropriations for STEM funding. She stated that STEM funding will be used for capital equipment purchases.
After reviewing both the proposed budget and the proposed three-year capital budget, the board voted unanimously to adopt both.
